Comcast Launches Plan to Take on Gig Internet Providers

Comcast has announced plans for a 2 gbps fiber network in Chattanooga, Tenn., and other select markets in the U.S. But experts are skeptical about its impact.

by / May 6, 2015
Experts are wondering if Comcast will really follow through on its 2-gigabit network in Chattanooga, Tenn. Shutterstock

Comcast is trying to one-up gigabit broadband providers – literally. The company unveiled plans on April 30 for 2 gbps Internet Service, which will compete with the city-owned 1-gig Internet service in Chattanooga, Tenn., and similar offerings in other areas.

Although Comcast’s Gigabit Pro is scheduled to debut next month, experts aren’t sure what that means for competition, or even if the cable giant will make good on its announcement. Questions also remain about whether there’s a demand for a 2-gig level of speed and if there is, whether middle-income residents will be able to afford it.

Chris Mitchell, director of the Telecommunications as Commons Initiative of the Institute for Local Self-Reliance, and a national expert on municipal broadband, told Government Technology that when providers typically build a fiber network, they run fiber directly to homes, or very close to them. He doubted whether Comcast has enough fiber installed to follow through with the network.

“If Comcast is actually going to be able to deliver 2-gigabit service to a lot of people's homes, they will have to install a ton of fiber … more fiber than is available, probably,” Mitchell said. “It would kill the market. So what it says to me is that this is going to be a boutique offering that will be unattractive to ordinary subscribers.”

Comcast was contacted for this story, but declined to provide additional details about the service.

The Electric Power Board of Chattanooga (EPB), offers 1-gig service to residents. The municipal broadband network has been online since 2009 and customers currently pay $69.99 per month for gigabit Internet speed.

The price of Comcast’s 2-gig plan, however, could range from $150 to $200, monthly, according to a report in the Chattanooga Times Free Press. In an interview with Government Technology, Danna Bailey, vice president of corporate communications for the EPB, said it was too early to comment on what a similar offering from EPB would cost.

Representatives from the EPB and the city aren’t intimidated by a new player on the block – they’re welcoming it. J. Ed. Martson, EPBs’s vice president of marketing, told the Times Free Press that a new entrant into the broadband market verifies that the business model the EPB uses is successful. Mayor Andy Berke added that Comcast’s plan will give Chattanooga’s residents more choices to access “critical infrastructure.”

Bailey agreed, adding that Comcast’s move “is certainly indicative” that Comcast has seen the value in gigabit connectivity.

“We’ve been lauding the benefits of a fiber-to-the-home network and its virtually unlimited capacity and possibilities for over five years,” Bailey said. “We do think it says something that a giant player in the market like Comcast is finally coming around to agree with us.”

Bailey stopped short, however, when asked if the EPB would match the 2 gigabit offering from Comcast. She said customers in Chattanooga are still talking about the speed they have now and are satisfied with it. Bailey confirmed, however, that if and when the EPB wants to offer 2 gigs, it will “absolutely” be able to do it through its existing fiber-optic network.

History Lesson

This isn’t the first time Comcast and Chattanooga have sparred over broadband expansion. Former Chattanooga Mayor Ron Littlefield said he approached the company in 2007, when the EPB was considering the launch of its fiber-optic Internet service and offered to drop the plan if Comcast agreed to provide fiber-to-the-home connectivity for city residents. The company declined, Littlefield said, citing cost concerns.

“That was their excuse, they just really didn’t want us to do it,” he said.

Despite the overture, Comcast sued the city four times, trying to stop the EPB from building out the network. The court ruled in Chattanooga’s favor, noting that the EPB fiber network was created primarily to manage the city’s power system – it was built when smart utility meters were being installed on homes – and the city can use the network in other ways as it sees fit.

Despite the lawsuits, Littlefield says there isn’t much ill will regarding Comcast in Chattanooga, due to the company’s charitable efforts in the community.

“We benefit from the fact that Comcast sees us as something of a laboratory where they can test their muscle, and we don’t really have to prove anything, because we have a system to manage anyway,” Littlefield said.

Lip Service?

Although a 2-gigabit connection sounds promising for Chattanooga residents, both Mitchell and Bailey were skeptical of Comcast’s intentions.

Mitchell said he thinks Comcast is simply trying to argue that it's offering the fastest service. He wasn’t sure whether it was just a marketing ploy, or if the company is sincerely trying to compete and improve connectivity in Chattanooga and other areas where Gigabit Pro was reportedly under development. In April, Comcast started rolling out the 2 gigabit offering in Atlanta, and aims to do the same in four communities in Florida and the San Francisco Bay Area later this year.

“Comcast is playing a game here, I think, where they are talking about a gig unrelated to a price,” Mitchell added. “What makes Google, Chattanooga, Longmont [Colo]., and all these other municipalities that are doing a gig special, is many of them are keeping it within the realm of an ordinary, middle-income household to afford it.”

A Comcast spokesperson said pricing information for Gigabit Pro will be available later this month.

Bailey noted that the only thing Comcast has shown in Chattanooga so far is just that – a press release. To her knowledge, there’s no actual network built or customers hooked up, so time will tell if Comcast puts its foot forward to roll out the 2-gigabit service.

“Frankly," she said, "the proof will be in the pudding."

Brian Heaton

Brian Heaton was a writer for Government Technology magazine from 2011 to mid-2015.